China misses WTO’s deadline to open up film industry

In line with expectations, China has missed the deadline set by the World Trade Organisation to lift restrictions on foreign film companies which includes a quota of 20 foreign films a year.

The WTO’s ruling had been in favour of the 2007 complaint filed by the United States and it was later agreed upon by China and the US that the deadline of 19th March i.e. 14months was reasonable for China to make changes.

In its latest status report submitted to the WTO on March 15, China says that although it was disappointed and had reservations about the ruling, it had made an effort to follow the recommendations of the Dispute Settlement Body. While it had made progress in many areas, there were still difficulties to overcome. “This dispute involves a number of Chinese administrative measures on cultural products and is embodied with more complexity and sensitivity than other disputes. In this regard, China hopes relevant WTO Members could understand the difficult and complicated situation China is facing during the process of implementation,” China’s status report states.

Hollywood has been eager to expand its presence and reach across China with the country’s box-office growing exponentially over the last few years.

Executive Vice President of the Motion Picture Association of America Greg Frazier said, in a statement, that while he was disappointed China had not complied with the WTO’s ruling in a timely fashion; they believe the Chinese authorities are working towards fulfilling their commitments.

Some believe a move towards opening up China’s markets, will not only help them reach a wider audience but that it will also reduce piracy which has cost American companies billions in revenue.

Local Chinese filmmakers, however, are worried about the increase in competition. Even with only 20 foreign films being allowed to enter the Chinese market every year, they have still accounted for nearly half of the country’s box-office revenues. They also use Taiwan’s faltering film industry as an example. Since Taiwan dropped its film restrictions in 2001, its domestic film industry has become largely irrelevant with international movies accounting for more than 90% of box office revenues. Besides the economic hit they will experience they argue that it will also affect the country’s cultural and national film identity.